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We are bringing forward a comprehensive package to help people back to work, but we also need to ensure that people are better off in work. The introduction of the national minimum wage and tax credits means that most people see significant gains from moving into
work, but we believe that it is right that work should be properly rewarded, so it is now time to introduce a guarantee that people are better off in work. In the longer term, we believe that that could be done through further significant benefit reform, such as a single working age benefit, but in the meantime we will introduce a new better off in work credit, which will guarantee that everyone who moves into work after being on benefit for six months or more will be at least £40 a week better off. We are also increasing the help for carers and parents who can work only for fewer than 16 hours because of their family responsibilities.
The housing benefit consultation also includes proposals to let people keep their full housing benefit payments for three months after moving into work and for setting fixed awards for up to six months to remove some of the uncertainty that comes with going back to work. We are also consulting on removing some of the highest rents that are distorting the system in a way that is unfair.
Lower than expected unemployment is already saving around £10 billion over the next five years on benefit spending alone, compared with Budget plans. It has also saved money within the £5 billion budget for helping people back to work, as fewer people than expected have reached six or 12 months' unemployment, where the more intensive help is on offer. Those savings now allow us to spend £400 million over the next 18 months-£300 million of it on the young unemployed-to support today's announcements. That investment is helping families across Britain at a difficult time. It is also supporting young people at the very start of their working lives, keeping up welfare reform at a time when it is more important than ever, and helping the public finances. This Government believe that we need to help people at a tough time. We will not turn our backs on people who lose their jobs. We will keep supporting them, not just in the recession, but in the recovery.
The White Paper and the housing benefit consultation set out a comprehensive package to help people back to work and ensure that they are better off in work. It sets out the next stage of benefit and welfare reform in pursuit of our goal to get 1 million more people in employment over the next five years. I commend this statement to the House.
Mrs. Theresa May (Maidenhead) (Con): I thank the Secretary of State for an advance copy of her statement.
At a time when nearly 2.5 million people are unemployed, and when we have record youth unemployment and a record level of economic inactivity, it is right that every effort should be made to provide help and support to get people back into work or trained and ready for work when the recovery comes. But today's flagship White Paper from Labour, coming as it does nearly two years after unemployment started rising, is little more than a restatement of previous policies.
Of course, some of those policies are very familiar to us, because they are our policies. More help for young people after six months; flexible employment programmes that give people support based on their needs, not what benefit they are on; reform of pathways to work-all are Conservative policies. Others, of course, are reannouncements of Government policies. A review of housing benefit was first announced in the Budget in 2008 and was due for publication in the first half of 2009. Perhaps the Secretary of State needed time to consider the U-turn that she has now performed on the
removal of the £15 payment for people who found lower than average rents. We welcome that move, but does the right hon. Lady agree that, far from setting out far-reaching reform of housing benefit, many of the measures in the consultation simply serve to reverse the mistakes made by the Government's first attempt at reform with the local housing allowance?
Speaking of the local housing allowance, the impact of the Government's decision to pay the money directly to the tenant has been families with increased rent arrears and landlords pulling out of the whole system. Indeed, the British Property Federation has said today that an alarming 55.5 per cent. of landlords who responded to a survey that it conducted stated that
"they now refuse to take on LHA tenants due to fears of rent arrears."
Why will the Government not adopt our policy of letting tenants choose whether the allowance is paid to them or directly to the landlord?
Other policies reannounced today include tougher measures to require the partners of benefit claimants to look for work. That was first announced in a Green Paper in the summer of 2008, then in a White Paper this time last year. It has now been announced yet again in this White Paper. A national roll-out of the better off in work credit was announced in the pre-Budget report, but it was first promised in 2008, and it was due to be introduced in 2009. Now we see from the White Paper that the credit is to be introduced in one region from October 2010, and that it is expected to be available nationally from 2011. Will the Secretary of State confirm that that represents a delay of two years for the introduction of the better off in work credit?
The need for that credit is an admission of failure for the Government, who have been insisting for the past 12 years that people are already better off in work. Will the Secretary of State finally admit that, under Labour, people can still be better off on benefits? Will she confirm that the in-work credit will last for six months and that, after that, those who have received it will once again be worse off in work? Will she also confirm that the increased payment to lone parents in work will be only a trial, and that it will not be available nationally?
Far from improving work incentives, the Prime Minister has made them worse during the recession. Will the Secretary of State confirm that figures hidden in the pre-Budget report reveal that the number of low-income families facing marginal tax rates of over 90 per cent. will have more than doubled during the recession?
I welcome today's focus on youth unemployment, but does the right hon. Lady agree that the Government are acting on this too late, when nearly 1 million young people are already unemployed? We have pledged to create 400,000 more apprenticeships, training places and work pairings over two years for young people who are out of work, so I welcome the fact that the Government have adopted our approach, and that there is a focus on training and apprenticeships in the White Paper. However, the Government have been downgrading apprenticeships to a level 2 qualification. Will the Secretary of State tell us how many of the new places being created will be apprenticeships at level 3?
In October, we pledged to give all young people real support after six months unemployment, so I welcome the fact that the Secretary of State has finally worked
out that young people need more help sooner to get into work. We called on her just last week to offer more help for young people after six months, but she refused to do so; the extra help would come after 10 months. Now, however, she has announced that the youth guarantee will be delivered after six months' unemployment, and that young people will be required to take up the help on offer as a condition of receiving benefit.
However, in describing the new young person's guarantee, the White Paper states that if someone is still unemployed after six months, they will be offered a job, training or internship, and will be required to take it up
"before they complete ten months on JSA."
So, for some young people, the extra help will still only come after 10 months. Which is correct: the Secretary of State's statement or the White Paper? Or is this just another piece of spin designed to gain a headline? For a Government who promised "real help now", it is not good enough that their flagship policy on youth unemployment will kick in almost two years after the recession began and unemployment first began to rise. Perhaps they were so slow to respond because the Prime Minister still believes that he has abolished youth unemployment.
We have heard some good ideas today-many of them our own-but yet again when we look at the detail we see that they are not big bold plans for reform; they are yet more consultations, pilots and pathfinders. As ever with this Labour Government, we have to judge them on what they do, not on what they say. Youth unemployment is at a record high. One in five young people cannot find a job. Eight million people are economically inactive-another record high. More children are growing up in workless households here than anywhere else in Europe. Now, in the dying days of this Government, they are rushing out a series of policy announcements aimed at grabbing votes as the election looms.
The Labour Government have had 12 years in which to introduce radical welfare reform. They have failed. Why should anyone believe that they will do as they say, when they have done nothing to deal with these problems for so long? The people paying the price are the millions who have been trapped in benefit dependency for years. Their children are growing up in poverty. Their health is suffering. Their self esteem has fallen away. That is the greatest moral failure of this Labour Government, and we will never let them forget it.
Yvette Cooper: The kind response to that would be to suggest that the right hon. Lady does not understand her own policies-and certainly does not understand ours. Let me deal in turn with the points that she raised.
The right hon. Lady talked about the level of youth unemployment. The youth claimant count for Great Britain in October was 462,000. In October 1992, in the last recession, it was 784,000. In October 1985, it was 980,000-more than twice as many young people on the dole as there are today. She says that we should judge her not on what she says, but on what she does, and we would certainly judge the Conservative party on what it did over 18 years in government.
The right hon. Lady said that we are introducing Conservative policies on youth unemployment. Until September, she did not have any policies on youth unemployment. It was only when her noble Friend
Lord Freud came up with a few that she had any policies at all. Even at that point, what was her policy for young people who have been unemployed for more than six months? It was not a guarantee of jobs or training-not at all. All she was offering was a bit of private sector help for young people. We are offering guaranteed jobs or training or work, but she would not fund that. She would not support our £5 billion additional investment.
The right hon. Lady's policy is to oppose and abolish the future jobs fund, which is delivering more than 120,000 job opportunities for young people right across the country. The Conservative party wants to say to those 120,000 young people, "That's it; your job's gone." This Government are increasing the support we give to young people, not just from day one but throughout a young person's experience of unemployment or inactivity. We believe that they should have more support; we believe that they should have more help; and we are prepared to put more investment into it.
We are prepared to put more investment into offering young people education and training places-for example, through the September guarantee, which is again something that the Conservative party opposes. The Conservatives oppose the extra investment in education and training places; they oppose the job opportunities; they want to turn their backs once again on young people right across the country because they simply do not care enough to be prepared to invest money that is a saving for the future.
The right hon. Lady also talked about the housing benefit measures. I did not hear her welcome proposals to include run-ons, for example, for people on housing benefit who are moving into work. I had hoped that she would support those proposals. We have said that there should be greater choice for tenants, so that their money may be paid to landlords, but we want to consult on whether there should be additional requirements, for example, on landlords to improve the condition of their properties as part of that. For the vast majority of tenants it is a good thing to have their money paid to them directly, as it increases their independence, but we want to look at how we can improve the private rented sector as well.
Let me respond to the points raised about whether people are better off in work. The right hon. Lady will have seen-I hope-from the information that we have put out today that we have already given people big increases in additional support. For a family with one child and one earner in full-time work, the weekly minimum income guaranteed as a result of Government support and the minimum wage has gone up from £182 a week to £309 a week-a 28 per cent. increase. For a couple over 25 in full-time work with no children, the amount has gone up from £117 to £234 -a 50 per cent. real-terms increase.
That is a substantial increase in support for people moving into work, through things such as the minimum wage, which the Conservative party opposed; through tax credits, which the Conservative party opposed; and through additional support for people. We think it right to ensure that there is a guarantee-a nice, clear, simple way of supporting people so that everyone is £40 a week better off. That is on top of the additional support that
the Chancellor announced this week for free school meals, which helps in particular families who are concerned about in-work costs.
I have set out today measures that expand support for young people and older people who are unemployed. They are designed to help tackle the unemployment problems that we face, but also to bring unemployment down further and faster than in previous recessions. We believe that active Governments should take such action rather than adopting the approach of the Conservatives, who want to roll back big government, leave people to sink or swim and abandon people to their fate, just as they did in the 1980s and 1990s. We will not allow that to happen again.
Hazel Blears (Salford) (Lab): My right hon. Friend's statement will be warmly welcomed in Salford, where we are only too well aware of the real effects of Tory party policies. In the early 1990s, a whole generation was consigned to the scrapheap as a result of those policies.
Will my right hon. Friend confirm that the measures she has announced will ensure continued support for companies such as B4Box in Salford, which is led by an inspirational woman entrepreneur, and which is providing construction skills and real jobs for a range of young people who would never normally have those chances? It is that enterprise and innovation that these measures will support.
Yvette Cooper: My right hon. Friend is right. She has talked to me, and to my right hon. Friend the Minister for Employment and Welfare Reform, about the company in her constituency which is doing such great work to support young people and give them opportunities. Providing that start in life and that step on the career ladder involves providing training as well as work experience. I know that my right hon. Friend the Minister will be happy to visit my right hon. Friend's constituency.
Steve Webb (Northavon) (LD): I am grateful to the Secretary of State for providing me with a copy of her statement. It is a bit of a shopping list, but there are some good things on that shopping list. I am pleased that lone parents may be able to keep more of the wages that they are paid for small part-time jobs. We need to end the dichotomy between work and non-work: there are now far more grey areas, and the encouragement that the statement provides is welcome.
I welcome the small increase in the carer's earnings allowance. It is probably not enough, but it is a step in the right direction. I also welcome the exploration of fixed housing benefit awards, which must be worth considering, and the U-turn on local housing allowance, an issue that I raised last week during Question Time. It is good that the Government have thought again.
In relation to in-work benefits, the right hon. Member for Maidenhead (Mrs. May) raised the significant issue of what would happen after the six-month period. I accept that there will be transitional costs and the early costs of a new job, but I worry about what will happen after six months to someone whose mortgage or rent payments simply cannot be afforded on a modest wage. Will the Secretary of State tell us what she envisages? I understand that there have been pilots. What happened
after six months to the people who could not then afford their mortgage payments, and do we need a more sustained way of helping people?
The White Paper proposes that lone parents who are training can receive income support in the summer, but the Welfare Reform Act 2009 provided for the abolition of income support. I am a little hazy about how the two fit together.
The Government are extending the work capability assessment to incapacity benefit recipients. In my view, it is currently having a very damaging effect on people receiving employment and support allowance, many of whom are being shunted on to jobseeker's allowance when they are not fit for work. The rate at which people are being transferred is much higher than was projected. What appraisal have the Government carried out of the current effect of the assessment, before applying it to a whole new group? I think that the issue will be filling all our postbags in the coming months and years if we do not get it right.
As for the issue of high housing benefit for people in high-rent areas, I can see that this makes a bad newspaper headline, but if-especially in London-people in high-rent areas are shunted into low-rent areas, is there not a risk that family networks that can provide child care will be broken up, that children will be moved from their existing schools, and that ghettoes will be created when everyone in temporary accommodation ends up in bits of London where the rents are cheap? Is that really a good by-product of policy?
Are we doing enough at the outset for the high-risk youth unemployed? Is it not the case that on day one of a claim it is possible to identify the high-risk groups, those with no qualifications and those in high-unemployment areas? In such cases, could we not intervene more intensively on day one?
The White Paper talks of doing more to in jobcentres match people with family-friendly jobs. Many people say to me "When I went to the jobcentre I expected the staff to help me to find a job, but all that they said was 'There's the internet'." Is there not a gap between the rhetoric and the reality? It would be great to think that Jobcentre Plus will match people carefully with jobs and family-friendly employers, but is it not the case that they are having enough trouble just keeping up with the paperwork? Is there the necessary resource for us to do the good things that the Secretary of State wants to do?
Yvette Cooper: I thank the hon. Gentleman for his comments, and I shall try to respond to each of his questions. I am grateful for his points on the carer's allowance and the support provided for people working for small numbers of hours. As we know, a lot of people cannot work for more than 16 hours, particularly those in families with caring responsibilities, and it is better for them to be able to work than not to be working, even if they can only work a small number of hours.
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